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A monopolist is deciding how to allocate output between two geographically separated markets

(East Coast and Midwest). Demand and marginal revenue for the two markets are:

P1 = 15 -Q1 ----> MR1 = 15 - 2Q1

P2 = 25 - 2Q2 ----> MR2 = 25 - 4Q2

The monopolists total cost is C = 5 - 3(Q1 - Q2 ). What are price, output, prots, marginal revenues, and deadweight loss if

(a) the monopolist can price discriminate?

(b) if the law prohibits charging deferent prices in the two regions?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91400326

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